Slower segment growth can still yield significant wins in the fastener category

Folklorists say people invent mythologies and superstitions about the things that are most important to them. If that's the case, fasteners must be pretty highly thought of. For example, the first century Roman Philosopher Pliny the Elder recommended hammering three iron nails into the lintel of a home's doorway to protect against evil. Simply carrying an iron nail in your pocket is purported to protect you against harm from troublesome faeries, and thrusting iron nails into the ground supposedly has the power to cure everything from toothaches to epilepsy.

Screws, too, have their own history of superstitions. Screws were believed to represent strength, stability, and power, and if you carried one, the screw would imbue the possessor with those attributes. If you were to find a random screw in your path, it might signify you’re about to enter into a significant relationship. Finding a rusty screw in your path, however, could be a warning of impending troubles or hardships.

It's no superstition, however, that fasteners of all types play a vital role for the LBM dealer. Unfortunately, the fastener market is not the same as it was this time last year. Then, building and remodeling was booming, interest rates were low, and the word "recession" wasn't being bantered about. Today, economic slowdowns, labor shortages, and supply chain issues both domestic and overseas are putting the pinch on the fastener industry.

"The industry continues to grapple with issues surrounding both the procurement of raw materials for fastener fabrication and overcoming COVID-related global shipping delays," explains Robert Shirley, product marketing manager for Simpson Strong-Tie. "Simpson Strong-Tie has been working to resolve those issues by leaning into our national sales and distribution network, which continues to achieve great success in getting product to the jobsite and in customer hands when they need it."

Other manufacturers agree with Shirley's synopsis of the current environment. As Robert Yates, associate product manager for SPAX (part of Altenloh, Brinck & Co. US, Inc.), points out, steel prices continue to fluctuate, as does the availability of raw materials. "Supply chain is still an issue and will continue to be, especially overseas," he says. "There is stability built into being domestically based and using domestic suppliers."

Phil Lail, president of Pan American Screw Fastener Group, also sees supply chain woes as a significant hurdle for the fastener industry, and he doesn't see it changing any time soon. "Container space on ships is still hit or miss," he explains. "Keeping the supply of product flowing for our customers is paramount and we are making some bold moves in the amount of inventory we try to keep on hand. Container costs have leveled out a little but the increases in ocean freight were the main reasons our costs went up multiple times in 2021 and the first quarter of 2022. I think the industry as a whole will still see inventory shortages through the balance of this year and with interest rates rising and talk of possible recessionary times, the whole industry is a little unstable."

Amy Blasé, director of product management, hardware solutions for the Hillman Group, sees the economy as the largest challenge the fastener industry will face over the coming year. "A slowdown with heavy construction and new housing is expected," she explains. "There is still a backlog, however, with projects in many sectors. With increasing costs in materials, labor, and shipping, many consumers may delay or scale back projects until they are more confident in the economy."

Jacek Romanski, channel marketing director for ITW Construction, also sees economic downturns having the most significant impact on the growth of the fastener segment. "We envision good growth to continue at the same steady pace through the end of the year," he says. "The question for us and with many of our contractors, dealers and distributors is, ‘What about 2023?’ We continue to hear there is still pent up demand from before the pandemic, and now with lumber prices dropping in recent months, we still envision a good amount of activity next year, just not at the same pace as the last few years. It will really depend on the impact of rising interest rates and inflation whether or not homeowners can truly afford to buy a new house or their ability to renovate their existing homes."

Of course, all of this has the potential to bring about price increases, and Lisa Martin, marketing director for Maze Nails, sees that factor as a significant challenge for the LBM dealer. "The volatile market has made it difficult for manufacturers and dealers to hold prices," she says.

"Planning in advance is the good philosophy during these unstable times. Serving customers will a quality product will include locking in prices and securing manageable lead times."

Still, manufacturers are doing everything they can to increase product flow so that backorders can be significantly reduced. "Supply lead times and delays in the past 18 months have been a challenge," says Uli Walther, president of U2 Fasteners. "We have tripled the amount of inventory in our warehouse to reduce back orders and ship complete orders."

With all these concerns and challenges, it would be easy to assume that growth within the fastener segment would be hard to find, let alone predict. Granted, manufacturers aren't foreseeing the same rate of growth for the next 12 months as was evidenced over the last year, and manufacturers seem to be bracing for a potential slowdown, but healthy growth rates are still on the horizon.

"We are positive about the growth outlook for fasteners despite the current economic conditions," says Eric Ashack, product manager for SPAX. "Although signs may point to a recession, and we know people are being conservative with inventory plays, we do expect growth. Perhaps not as much growth as we’ve seen in recent years, and likely more in the remodeling area vs. new builds, but growth nonetheless."

Hillman Group's Amy Blasé echoes Ashack's prediction. "Given the boom in the construction and remodeling industry over the past two years, along with current state of the economy, growth appears to be tracking to pre-COVID year-over-year levels," she says. "The industry will still be strong, but likely not growing at the rates we saw in 2020 and 2021."

Michael Engle, senior director of branded product for PrimeSource, agrees. "The fastener industry will continue to experience growth, with the majority concentrated in specialty fasteners," he says. "Contractors remain in high demand with jobs scheduled months in advance; with that, they are looking for fasteners that get the job done quick and get the job done right. As lumber prices and the housing market begin to self-correct and we see volatility dampen, we believe the DIY segment will gain strength in the next 12 months. Given recent trends, we expect consumers will look to update their current homes rather than make a move on a new home with substantially higher interest rates than in recent history."

Other fastener manufacturers also see growth at a slower year-over-year rate, but they point out that different fastener segments may see more positives than negatives. "Several of our major customers are adjusting forecasts down to pre-COVID levels," explains Pan American's Lail. "Our 12 month outlook and budgeting for 2023 includes what we are calling a COVID Hangover slowing in demand for outdoor living products. Other divisions of our company that serve the woodworking, metal roofing and door and window markets are not seeing as much change in business and see a bright outlook for the next 12 months. Because we were in a favorable inventory position while other competitors were suffering shortages, we were fortunate to pick up market share over the past 12 months that will help sustain us going forward."

Doug Hutchings, vice president of product development for National Nail (the parent company of the CAMO Brand), suggests growth may also come from the decking market. "I see the market cooling slightly in the postpandemic period with concerns over inflated pricing, high costs and the labor shortage, and a looming recession impacting consumer confidence," he explains. "That being said, we view the deck building market as stable-to-relatively strong due to our contractors’ high level of pent-up demand for the remainder of the year."

As well, domestic production may help bolster any stagnation, and fastener manufacturers suggest LBM dealers turn to sources closer to home. "With continuing and widespread supply chain challenges, containers lined up for miles at ports and the short supply of truck drivers, ‘Made in U.S.A’ fasteners will see an increased growth of sales," says Maze Nail's Lisa Martin. "Well-prepared American manufacturers have large fastener inventories. Their carefully managed transportation networks make them a reliable source for fastener needs."

Of the trends that are driving growth in the fastener segment, many manufacturers point to the increase in mass timber construction. As reported by the market research group IMARC, by 2025, mass timber is expected to account for $1.4 billion of the $14 trillion global construction industry—not surprising, considering the use of mass timber panels can bring significant cost savings and reduced construction time. Mass timber is also less sensitive to temperature changes and can increase overall structural energy efficiency, and fastener manufacturers recommend LBM dealers pay close attention.

"The use of heavy timber, mass timber, and cross laminated timber is a growing trend in both commercial and residential construction requiring connectors and fasteners designed for strength and durability," explains Simpson Strong-Tie's Shirley. "Simpson Strong-Tie has expanded our family of Strong-Drive Timber screws into a broader range of fully-threaded and partially threaded fasteners in lengths and diameters deigned to meet a wider variety of applications including beam reinforcement, wall-to-wall, floor-to-floor, support beam, butt joint, bearing reinforcement, and splitting reinforcement."

Pan American's Phil Lail also points to the increasing use of mass timber as a growth opportunity for LBM dealers. "We continue to see growth in the mass timber and cross laminated timber applications," he reports. "Once it was prominent in only a select few geographical areas of the country, but we are seeing that market expand quickly across the US and Canada. Sales of our Big Timber BTX and STX construction lags screws were up over 35% last year and we are seeing growth from North Carolina to California and all points in between."

This increased interest in building techniques and materials that fall within the concept of sustainable construction is going to require increased availability of fasteners specifically designed for those purposes. "Sustainable design, such as the use of cross-laminated timber and ensuring zero carbon emissions, are the wave of the future," says SPAX's Ashack. "These concepts will become more mainstream in the U.S., as they have been in Europe and Canada for some time. We are fortunate to rely on the expertise of the international side of our SPAX team to bring us up to speed quickly in that space."

It's not merely the need to adapt to new building techniques that's driving growth in the fastener industry. New product development is also being pushed by the need to overcome the challenges of a diminished trade workforce. Pointedly aware of the needs of the LBM dealer to provide their customers with products that are easier and quicker to use, fastener manufacturers are busily creating new offerings that deal with these challenges.

"From a design standpoint, Simpson Strong-Tie is researching and re-engineering fasteners with the contractor in mind," explains Simpson Strong-Tie's Shirley. "Specifically, we’re looking to solve pain points by targeting improvements in connection strength, driving speed and efficiency, cost improvement, and installation ergonomics. Products like the new Simpson Strong-Tie finish trim and wafer head screw with a patented SawTooth point are designed to start fast and eliminate the need for predrilling, and a 6-lobe drive recess ensures positive engagement for the drive from start to finish."

With labor shortages remaining a significant pain point for contractors, LBM dealers need to be prepared to offer choices in fasteners and the needed tools to install them that decrease the dependency on manpower.

"Whether you’re a home builder, decking specialist, or remodeler, there is shortage of help causing longer lead times for projects to get completed," says ITW's Romanski. "Fastening systems allowing pros to improve productivity puts dollars in their pocket in the long run by allowing to finish faster and without hassles. There has never been a stronger reason for the pro to go cordless with their power fastening tools. With our newly updated Paslode Cordless 16 ga. Angled Finish Nailer, pros can get to work faster without the added time of rolling out a hose or compressor, let alone if you are working in a furnished home, such as installing new windows."

Pan American's Phil Lail agrees on the importance of providing product that decreases the amount of installation time. "We are seeing more end users interested in products like our pneumatic Mantis clip installation tool. As the labor market shrinks, tools like this help the deck builder finish products faster and more efficiently using less labor hours."

It's about providing products that deliver solutions, points out Maze Nails’ Martin. "Maze has seen growth in our painted nail line and our wide range of specialty nails," she says. "With the increased prefinished siding and trim market comes the need for color matched accessories including nails. We have observed an uptick of specialty nails for both manufacturing and product specific products. Having the capability to manufacture nails to exact specifications offers an easy solution for many manufacturers who need nails or pins for use in their operations. Engaged retailers can often be the conduit for fasteners into those factories."

Beyond mass timber and its increasing use, other building materials that fall outside of traditional lumber are requiring fastener manufacturers to develop new solutions, and LBM dealers need to be able to meet these growing demands.

As an example, SPAX's Yates points out the increasing use of composite materials and the need for fasteners developed specifically for composite's unique properties. "Treated lumber lasts 8-10 years, while composite lumber lasts a lot longer," he says. "There's a need for fasteners to be more durable and have great longevity. We’re keeping all of this in mind."

Hand in hand with the use of composites is the emerging trend of steel deck framing—a building style that has its own unique fastener needs. "The growth of steel framing for decks require specially-designed fasteners and tools to make the experience faster and easier," says National Nail's Hutchings. "CAMO met the market need for this trend with our award-winning EDGEXMETAL clips, explicitly designed for steel-framed applications."

Hutchings also points out the need for more consumer education regarding stainless steel fasteners. "The fastener selection for projects exposed to the elements, such as salt-water coastal areas, farming projects, lake and pool areas, or for unique wood species such as cedar and redwoods is important to learn," he says. "Stainless steel is the best alloy for any application, but understanding the different grades will help keep projects safe, long-lasting, and looking great."

Sometimes, however, new solutions are found in already-existing fasteners, and LBM dealers should stay atop these developments so that they are best poised to provide these solutions to their customers. "We had our wood screws tested in concrete," explains U2 Fasteners’ Uli Walther. "Now U2 Fasteners are truly multi material screws. We have ultimate load values for most sizes."

It goes without saying that any given LBM dealer wants to be top of mind with their customer base when it comes to best providing needed products and solutions, and fastener manufacturers have some pretty specific recommendations as to how best to win customer loyalty.

The first—and perhaps the most obvious—strategy is for the LBM dealer to ensure as best as possible a stable supply chain, and then use it to maintain your inventory. Granted, supply chain issues can be a constant headache, but the more effort a dealer puts in to stabilizing product availability, the better chance of creating a return customer. "You can't sell from an empty wagon," says Maze Nails’ Martin. "LBM dealers need to focus on having an inventory of quality products that have a strong supply chain and no outages. Focus on the products that have shown reliability and are quick to be restocked so that inventory shortages are kept to a minimum. Providing customers with knowledgeable information and stocked shelves will prove to be a significant selling advantage for attentive dealers."

ITW's Romanski agrees about the necessity of stable inventory for LBM dealers, but also points out the need to offer choices. "Time is money for the pro, and ensuring that LBM dealers have the right product on the shelf is also a way to improve productivity for the pro contractor," he explains. "A contractor wants to come in grab what they need and get back to the job site. The last thing they want is to go to a dealer and not have the right fasteners or enough quantity of the fasteners they need to get the job done and force them to go to another location. LBM dealers should consider including a broad fastener portfolio offering and include additional facings or general stock of their highest selling fasteners to ensure their customers can get their fill. They will in turn identify them as the destination for all their fastening needs."

U2 Fasteners’ Uli Walther points out how a little forethought and planning can go a long way. "Contact your fastener provider and check their stock levels before quoting large jobs. We will have it in stock!"

Hillman's Amy Blasé recommends also investing in products for the repair and remodel categories as well. "Having the right product in the appropriate quantities available when the job needs it will remain critical," she says. "In addition, offering high-performance products that can save time on the job, and ultimately money, will drive customer satisfaction and repeat purchases."

Having product on hand, however, is only half the battle. Without keeping up with product education and being able to serve as an information resource to the customer, fastener manufacturers warn LBM dealers will be missing out on building long-term customer relationships. As Pan American's Phil Lail explains, "With so many fastener options in the market right now for threaded fasteners and hidden fasteners, education is the key to making good choices. Dealers should make sure their staffs are up to date on the latest products and how they compare to others in the marketplace. Your end users stake their reputations on their work and count on the dealers to help them make the right choices."

By staying on top of the product knowledge game, LBM dealers will be able to be an innovation leader for their customers. "Lead with innovative solutions and best practices advice that can help contractors improve productivity and increase margins," recommends National Nails’ Hutchings. "Be the dealer that provides ‘value’ by teaching best practices and sharing innovative solutions proactively and not be passive in the fastening sector."

If there's a single takeaway that should give heart to the LBM dealer, it's that growth, while potentially slower than in 2021, is still likely. Fasteners are not an optional commodity; construction and remodeling can't happen without them, and manufacturers are doing everything in their power to ensure dealers have what they need to succeed. It's as Maze Nails’ Lisa Martin puts it: "Listening to the customers and serving them great products is what makes a business expand and grow.

Stay Updated

Get our email newsletter with LBM industry trends, data, new products, and best practices.